Centaurus Financial Sanctioned By FINRA For Failure To Supervise Variable Annuity Exchanges

Centaurus Financial, Inc [CRD: 30833, Anaheim, California] entered into a Letter of Acceptance, Waiver and Consent with FINRA addressing supervisory failures tied to variable annuity exchange recommendations, according to FINRA's Disciplinary and Other FINRA Actions report for September 2026.

The AWC, issued July 15, 2026, also named Patrick Michael Carroll [CRD: 2676119, Cadillac, Michigan], a representative associated with the firm. Centaurus Financial and Carroll consented to the sanctions and to the entry of findings without admitting or denying them, according to FINRA.

FINRA Sanctions Against Centaurus Financial

Under the AWC, FINRA censured Centaurus Financial, fined the firm $475,000, and ordered it to pay $634,488.56 in restitution to customers, according to FINRA. Carroll was fined $10,000 and suspended from association with any FINRA member in all capacities for 12 months, according to FINRA.

FINRA found that the firm failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with applicable rules regarding recommendations of variable annuities by three representatives, according to the findings.

Supervisory System Findings On Deferred Variable Annuity Exchanges

FINRA found that the firm failed to establish a supervisory system or written supervisory procedures reasonably designed to supervise recommended deferred variable annuity exchanges to determine if they were suitable. The findings state that the firm did not provide reasonable guidance to principal reviewers regarding the impact of surrender fees on the suitability of exchanges, nor did it provide reasonably detailed standards for assessing the loss of benefits, such as living benefit riders.

The findings also state that the firm lacked procedures reasonably designed to surveil its representatives' rates of deferred variable annuity exchanges, including who was responsible for such surveillance, how often it would take place, what tools to use to conduct the surveillance, or what parameters to consider when evaluating whether exchange rates were inappropriate.

Findings On Carroll's Variable Annuity Exchange Recommendations

FINRA found that Carroll recommended, and the firm failed to reasonably supervise, 88 unsuitable variable annuity exchanges that Carroll lacked a reasonable basis to recommend, according to the findings. Carroll documented the amount of the surrender fees each customer paid and the bonuses they would receive, but he failed to reasonably consider and document the impact of surrender fees on the suitability of the exchange, and relatedly, whether, and to what extent, the customers would benefit from the bonus-share's increased fees and surrender period given the amount of surrender fees they paid and the bonus amount they received, according to the findings.

FINRA found that the firm failed to identify or investigate red flags suggesting that the transactions may be unsuitable. The firm failed to reasonably consider key suitability factors, including the surrender fees imposed, totaling $561,409.01, and the loss of appreciated living benefit riders for several of the customers, according to the findings.

The findings also state that the firm's written policies and procedures were not reasonably designed to achieve compliance with Rule 15l-1(a)(1) under the Securities Exchange Act of 1934, known as Reg BI, or to address conflicts of interest associated with variable annuity and account-type recommendations.

Sources

• FINRA, Disciplinary and Other FINRA Actions, September 2026, page 1
• FINRA BrokerCheck report for Centaurus Financial, Inc (CRD 30833)

Questions About An Account Handled By Centaurus Financial?

If you have questions about an account handled by Centaurus Financial, you can contact Soreide Law Group at (888) 760-6552 or online to speak with a securities attorney. Our securities lawyers handle FINRA arbitration claims on a contingency fee basis. Learn how FINRA arbitration works.

This post summarizes public records published by FINRA, including BrokerCheck, as of September 25, 2026. Allegations in customer complaints and arbitrations are claims, not findings, and a settlement is not an admission of wrongdoing. The records may be updated or corrected after this date.